Netflix, despite maintaining its leadership position in the subscription streaming sector, is exploring new strategies to raise the time its users spend on the platform. As reported by The Wall Street Journal, the company is debating modifications that could align its service with the conventional television experience, including offering channels with uninterrupted programming and the option to offer third-party subscriptions within the app itself.
Focus on User Engagement
The level of engagement is considered a crucial factor for subscriber retention in the streaming market. The more time users spend watching movies and series and the higher the completion rate of this content, the lower the chance of subscription cancellation. Among the options under review is the creation of linear channels, which would continuously display specific or categorized programs, mimicking traditional television.
Another alternative being considered is allowing subscribers to purchase services from other streaming companies directly through the Netflix application, a model already implemented by competitors such as Amazon and Apple.
Strategic Transformation of the Company
If these changes are implemented, they will signal a substantial shift in Netflix's approach. Previously, the company's priority was to maintain a platform dedicated solely to its catalog and simplified navigation. However, in an increasingly competitive market scenario, the company shows a willingness to expand this model.
Competitive pressure comes from various factors, including competitors like Disney, HBO Max, and YouTube, as well as the rise of free, ad-supported services and linear channels among consumers. In recent years, Netflix has also adjusted previous stances; a notable example was the adoption of the ad-supported plan, which was initially rejected but now integrates into its growth strategy.
Investor apprehension has also grown after rumors that the company had evaluated the acquisition of Warner Bros. Discovery. Although this transaction did not materialize, the episode raised questions about the platform's expansion pace.
Market Analysis and Content Expansion
Uday Cheruvu, an analyst and portfolio manager at Harding Loevner, pointed out to the WSJ that the most relevant aspect is subscriber behavior in response to constant price increases and the possibility that engagement has reached a plateau in more consolidated markets, such as the United States.
Parallel to studying these structural changes, Netflix has been diversifying its offering with lower-cost content. This includes investments in formats such as video podcasts and short videos produced by publishers. Another area of expansion involves collaborations with television broadcasters. In France, for example, the platform already grants subscribers access to TF1's programming, including news broadcasts.
Live events continue to be a focus of interest. The company seeks to intensify its participation in this segment but without directly competing for the rights to major sports leagues. Sources close to the negotiations indicate that executives are discussing proposals related to the 2030 and 2034 World Cups.
